The ITO, Ward-8(2), Ahmedabad V. Suzuki Suitings Pvt.Ltd., Ahmedabad

ITA 1401/AHD/2007

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 5561 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 3 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-07-2010
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 22-06-2010
• Assessment Year: 2000-2001
• Appeal Filed On: 09-04-2007
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: K M MAHESH
• Assessee Lawyers: PAMIL H SHAH
• Keywords: Principle of natural justice; Additional evidence; Block assessment; TDS
• Section: 133A; 143(1); 251; 143(2); 68; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH 'C' [BEFORE S/SHRI T K SHARMA,JM & A N PAHUJA,AM] ITA NO.1401/AHD/2007 (ASSESSMENT YEAR:-2000-01) INCOME-TAX OFFICER, WARD- 8(2), AHMEDABAD V/S SUZUKI SUITINGS PVT. LTD., 34, SHREEJI CLOTH MARKET, SARANGPUR GATE, AHMEDABAD [PAN: AACCS 1008 H] [APPELLANT] [RESPONDENT] REVENUE BY :- SHRI K M MAHESH, DR ASSESSEE BY:- SHRI PAMIL H SHAH, AR O R D E R A N PAHUJA: THIS APPEAL BY THE REVENUE AGAINST AN ORDER DATED 29- 01-2007 OF THE LD.CIT(APPEALS), CENTRAL, JAIPUR, RA ISES THE FOLLOWING GROUNDS :- 1. THE ID. CIT(A) HAS ERRED IN LAW AND IN FACTS OF THE CASE IN DELETING ADDITION OF RS.1,00,000/- ON ACCOUNT OF A LUMP SUM ADDITION MADE BY THE A.O. ON ACCOUNT G.P. IN ABSENCE OF BOOKS OF ACCOUNTS. 2. THE ID. CIT(A) HAS ERRED IN LAW AND IN FACTS OF THE CASE IN DELETING THE ADDITION OF RS.19,91,982/- ON ACCOUNT OF BROKER AGE EXPENSES. 3. THE ID. CIT(A) HAS FURTHER IN LAW AND IN FACTS O F THE CASE IN CONSIDERING FRESH EVIDENCE IN FORM OF VARIOUS EXHIB ITS WITHOUT CONFRONTING THE SAME TO A.O. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD. CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFF ICER. 5. IT IS THEREFORE, PRAYED THAT THE ORDER OF THE LD . CIT(A) MAY BE SET- ASIDE AND THAT OF THE ORDER OF THE ASSESSING OFFICE R BE RESTORED TO THE ABOVE EXTENT. 2 ADVERTING FIRST TO GROUND NO.1 IN THE APPEAL, F ACTS, IN BRIEF, AS PER RELEVANT ORDERS ARE THAT RETURN DECLARING LOSS OF RS.12,560/- AND BOOK PROFIT OF RS.49,088/- U/S 115JA OF THE INCOME -TAX ACT,1961 [HEREINAFTER REFERRED TO AS THE ACT] FILED ON 30 -11-2000 BY THE ASSESSEE, ITA NO.1401/AHD/2007 FOR AY 2000-01 SUZUKI SU ITINGS PVT. LTD. 2 MANUFACTURING AND TRADING IN CLOTH, AFTER BEING PRO CESSED ON 30-04- 2001 U/S 143(1) OF THE ACT, WAS SELECTED FOR SCRUT INY WITH THE ISSUE OF NOTICE U/S 143(2) OF THE ACT ON 22.11.2001. SUB SEQUENTLY, JURISDICTION OVER THE ASSESSEE WAS TRANSFERRED TO ACIT(CENTRAL),AJMER W.E.F 11.2.2002. APART FROM SEE KING DETAILS/ EVIDENCE VIDE QUESTIONNAIRE DATED 21.2.2003, THE ASSESSING OFFICER[AO IN SHORT] ASKED THE ASSESSEE TO PRODUCE THE BOOKS OF ACCOUNTS AND VOUCHERS ON 28.2.2003. HOWEVER, ON THE SAID DATE, AN APPLICATION FOR ADJOURNMENT WAS RECEIVED THROUGH PO ST. ACCORDINGLY, CASE WAS ADJOURNED TO 6.3.2003, WHEN THE ASSESSEE F ILED FEW DETAILS. INTER ALIA, THE ASSESSEE WAS DIRECTED TO JUSTIFY PAYMENT OF BROKERAGE, REBATE AND DISCOUNT PAYMENTS AND PRODUC E BOOKS OF ACCOUNTS AND VOUCHERS. FOR THIS PRPOSE, CASE WAS AD JOURNED TO 13.3.2003.HOWEVER, AGAIN ADJOURNMENT WAS SOUGHT ON 12.3.2003 FOR 20.2.2003, WHEN SHRI KAPIL SETHI AND SHRI RAJESH CH OUDHRY EMPLOYEE OF THE COMPANY FILED LETTER DATED 19.3.200 3 ALONG WITH FEW DETAILS. INTER ALIA, IN PARA 9 OF THEIR LETTER IT WAS SUBMITTED THAT THE ASSESSEE WAS UNABLE TO PRODUCE COMPLETE BOOKS OF AC COUNTS AND VOUCHERS, BEING VOLUMINOUS AND THAT THEY WERE PRODU CING LEDGER, CASH BOOK AS WELL AS VOUCHERS ON SAMPLE BASIS. HOWE VER, THE AO MENTIONED IN THE ASSESSMENT ORDER THAT NO SUCH BOOK S OF ACCOUNTS WERE EVER PRODUCED. ON THE NEXT DATE OF HEARING ON 24.3.2003, ADJOURNMENT WAS AGAIN SOUGHT FOR 30.3.2003,WHICH W AS A SUNDAY. IN THESE CIRCUMSTANCES WHEN THE ASSESSEE DID NOT PR ODUCE RELEVANT BOOKS OF ACCOUNTS DESPITE SUFFICIENT OPPORTUNITY AL LOWED, THE ASSESSMENT WAS COMPLETED ON THE BASIS OF MATERIAL O N RECORD. THE AO NOTICED FROM THE DETAILS FURNISHED BY THE ASSESS EE THE FOLLOWING TRADING RESULTS :- AY 2000-01 AY 1999-2000 -------------- ------------- ---- SALES 9,46,95,346 9,31,58,436 G.P. 71,65,533 94,71,749 ITA NO.1401/AHD/2007 FOR AY 2000-01 SUZUKI SU ITINGS PVT. LTD. 3 HOWEVER THE BASIS FOR WORKING OUT GROSS PROFIT WAS NOT DISCLOSED. MOREOVER SINCE THE ASSESSEE DID NOT PRODUCE RELEVAN T BOOKS OF ACCOUNTS DESPITE SUFFICIENT OPPORTUNITY AS AFORESAI D, THE AO REJECTED BOOK RESULTS AND ADDED AN ADHOC AMOUNT OF RS. 1 LAC . 3. ON APPEAL, THE ASSESSEE CONTENDED THAT THE T URNOVER OF THE COMPANY BEING ABOUT RS.10.00 CRORES AND RECORDS BEI NG VOLUMINOUS, THE AO WAS REQUESTED THAT THE BOOKS OF ACCOUNTS AND VOUCHE RS ON SAMPLE BASIS MAY BE IDENTIFIED FOR VERIFICATION IN ORDER TO AVOID INCO NVENIENCE IN CARRYING THE ENTIRE VOLUMINOUS RECORDS. HOWEVER, THE A.O. DID NOT APPRE CIATE THE SAID FACT. MOREOVER, THE G.P. DURING THE YEAR UNDER CONSIDERAT ION BEING HIGHER THAN THE PREVIOUS YEAR, IN THE ABSENCE OF ANY MATERIAL/EVIDE NCE ON RECORD , THE AO WAS NOT JUSTIFIED IN REJECTING THE BOOK RESULTS MERELY ON THE GROUND OF NON-PRODUCTION OF COMPLETE BOOKS OF ACCOUNTS AND VOUCHERS. IT WAS ALSO POINTED OUT THAT DURING THE COURSE OF SEARCH/SURVEY IN THE PREMISES OF THE COMPANY ON 24/03/2000, THE ENTIRE BOOKS OF ACCOUNTS OF VARIOUS CONCERNS OF THE GROUP, INCLUDING THE ASSESSEE WERE TAKEN BY THE SEARCH PARTY ON A HARD D ISK , SEIZED VIDE SERIAL NO.2 OF ANNEXURE-A TO THE PANCHNAMA DATED 12-4-2000 .PR INT OUTS FROM THE SAID HARD DISK WERE ALSO TAKEN BY THE AO. WHILE RELYING UPON A NUMBER OF DECISIONS IN PUSHPANJALI DYEING & PRINTING MILLS(P) LTD. VS. JT CIT (2001) 72 TTJ (AH D.) 886, SHREE GAUTAM TEXTILES VS. ITO (2001) 72 TTJ (JODH.) 169, ITO VS. MANGALAM CHEMICALS (2000) 69 TTJ (PAT.) 685,. ASST. CIT VS. MAHESH T. PATODIA (2001) 79 ITD 40 (PUNE), SHANKER RICE COMPANY VS. ITO (2000) 72 ITD 139 (ASR.)(SB).,GANESH FOUNDRY VS. ITO (2000) 67 T TJ 434 (JODHPUR), ASST. CIT VS. KHAMBHATTA FAMILY TRUST (1998) 62 TTJ (AHD.) 68 5, S. GURJAL SINGH TULI VS. ACIT (2000) 73 ITD 365 (NAGPUR), VINOD KUMAR PRAMOD KUMAR VS. ITO (2000) 66 TTJ 722 (JODHPUR) AND MANHOR LAL VS. ITO (2000) 68 TTJ 27 (JODHPUR), THE ASSESSEE CONTENDED THAT THE AO WAS NOT JUSTIFIED IN MAKING AN ADHOC ADDITION. IN THE LIGHT OF THESE SUBMISSIONS, THE LD. CIT(A) CONC LUDED AS UNDER: ITA NO.1401/AHD/2007 FOR AY 2000-01 SUZUKI SU ITINGS PVT. LTD. 4 4.2 IT IS MENTIONED BY THE A.O. THAT ASSESSEE ONLY WANTS TO PRODUCE VOUCHERS ON SAMPLE BASIS, IT MEANS HE ONLY WANTS TO PRODUCE THOSE VOUCHERS WHICH ARE FAVOURABLE TO HIM. DURING THE CO URSE OF ASSESSMENT PROCEEDINGS THE ASSESSEE DID NOT PRODUCE BOOKS OF A CCOUNTS AND VOUCHERS. FURTHER, IT IS MENTIONED THAT ASSESSEE VI DE NOTICE DATED 21/2/2003 WAS ASKED TO PRODUCE ALL BOOKS OF ACCOUNT S AND VOUCHERS ON THE DATE OF HEARING. THE ASSESSEE AGAIN VIDE ORDER SHEET DATED 6/3/2003 AND 23/3/2003 WAS ASKED TO PRODUCE .BOOKS OF ACCOUN TS WITH VOUCHERS. IN THE ABOVE FACTS HE CONCLUDED THAT SINCE THE ASSESSE E DID NOT PRODUCE PURCHASE BILL, SALE BILL , TRADING RESULT DECLARE B Y THE COMPANY CAN NOT BE VERIFIED HENCE BOOKS OF ACCOUNTS ARE REJECTED. AFTE R REJECTION BOOKS OF ACCOUNTS HE MADE AN ADDITION OF RS. 1,00,000/-. 4.3 CONCLUSION :- IT IS SUBMITTED BY THE ID. COUNSEL THAT IT IS A CAS E OF A COMPANY WHICH HAD A TURN OVER OF 9.46 CRORES. THE BOOKS OF ACCOUNTS W ERE AUDITED UNDER THE COMPANIES ACT AS WELL AS FOR THE PURPOSE OF TAX AUD IT. THE A.O. REQUIRED THAT ASSESSEE SHOULD PRODUCE ALL THE BOOKS OF ACCOU NTS INCLUDING SALE AND PURCHASE VOUCHERS. THE A.O. REQUIREMENT WAS NOT SPE CIFIC, THEREFORE, IN THE FACTS OF THE CASE CAN THE ASSESSEE BE PENALIZED FOR NOT COMPLYING WHICH SUCH KIND OF NOTICE. FURTHER, IT IS ALLEGED T HAT FOR THE FIRST TIME NOTICE FOR HEARING WAS ISSUED ON 21/2/2003 ASKING FOR VOLU MINOUS DETAILS INCLUDING PRODUCTION OF BOOKS OF ACCOUNTS WITH BILL S AND VOUCHERS. THIS KIND OF NOTICE WILL ITSELF SPEAK OF THAT A.O. DID N OT HAVE ANY SPECIFIC QUERY IN HIS MIND. IN THE FACTS OF THE CASE I AGREE WITH THE ID. COUNSEL THAT A.O. OBSERVATION ARE GENERAL IN NATURE. IN THE FACTS OF THE CASE HE SHOULD HAVE SELECTED SOME ITEMS OF EXPENSES OR RECEIPT OR ANY O THER SPECIFIC ITEM WHICH HE WANTED TO VERIFY. GENERAL REQUIREMENT NAME LY PRODUCE BOOKS OF ACCOUNTS WITH BILLS AND VOUCHERS CAN NOT BE FULFILL ED. EVEN IF ASSESSEE HAVE MADE AN ATTEMPT TO PRODUCE THEM BY BRINGING TH E BOOKS OF ACCOUNTS FROM AHMEDABAD TO AJMER WHETHER THE A.O. WOULD HAVE VERIFIED THEM CERTAINLY NOT. IN VIEW OF THE IMPOSSIBLE REQUIREMEN T OF THE A.O. THE ASSESSEE CAN NOT BE FAULTED WITH FOR ITS NON COMPLI ANCE. FURTHER, THE ACCOUNTS OF THE ASSESSEE ARE AUDITED TAX AUDIT REPO RT IS THERE, THEREFORE, UNLESS THERE IS A SPECIFIC REASONS/MATERIAL DEFECTS THE BOOKS OF ACCOUNTS MAINTAINED BY THE ASSESSEE CAN NOT BE REJECTED. IN VIEW OF THE ABOVE THE A.O. IS NOT JUSTIFIED IN REJECTING THE BOOKS OF ACC OUNTS AND MAKING LUMP- SUM ADDITION, HENCE ADDITION IS DELETED. 4. THE REVENUE IS NOW IN APPEAL BEFORE US AGAINST THE AFORESAID FINDINGS OF THE LD. CIT(A). THE LEARNED DR SUPPORTE D THE ORDER OF THE AO WHILE THE LD. AR ON BEHALF OF THE ASSESSEE CONTE NDED THAT GP HAS INCREASED FROM ABOUT 7 % IN THE PRECEDING YEAR TO 10% IN THE YEAR UNDER ITA NO.1401/AHD/2007 FOR AY 2000-01 SUZUKI SU ITINGS PVT. LTD. 5 CONSIDERATION. RELYING UPON THEIR SUBMISSIONS BEFOR E THE LD. CIT(A), IT WAS CONTENDED THAT THE AO WAS NOT JUSTIFIED IN MAKING ADHOC ADDITION. 5. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH THE FACTS OF THE CASE. UNDISPUTEDLY, THE ASSESSEE COMPANY HAD A TURN OVER OF 9.46 CRORES AND THE BOOKS OF ACCOUNTS WERE DULY AUDITED . THE LD. CIT(A) FOUND THAT SINCE THE RECORDS WERE VOLUMINOUS AND THE REQUIREME NTS OF THE AO WERE NOT SPECIFIC, GENERAL REQUIREMENT FOR PRODUCTION OF COM PLETE BOOKS OF ACCOUNTS WITH BILLS AND VOUCHERS COULD NOT BE FULFILLED. ACCORD INGLY, THE LD. CIT(A) CONCLUDED THAT IN VIEW OF IMPOSSIBLE REQUIREMENT OF THE A.O, THE ASSESSEE COULD NOT BE FAULTED AND THEREFORE, HE DELETED THE ADDITION. TH E LD. DR DID NOT PLACE ANY MATERIAL BEFORE US IN ORDER TO CONTROVERT THE AFORE SAID FINDINGS OF THE LD. CIT(A). THERE IS NO APPARENT BASIS FOR ADHOC ADDITION OF RS . 1 LAC, ESPECIALLY WHEN GP RATE IN THE YEAR UNDER CONSIDERATION UNDISPUTEDLY I NCREASED TO 10 % FROM 7.47% IN THE PRECEDING YEAR. IF THE ESTIMATE MADE BY THE ASSESSING AUTHORITY IS NOT ARBITRARY AND HAS NEXUS WITH THE FACTS DISCOVERED, THE SAME CANNOT BE QUESTIONED. BUT IN THE INSTANT CASE, THE ASSESSM ENT HAVING BEEN TAKEN UP AT THE FAG END OF LIMITATION WHILE THE RECORDS BEING VOLUMINOUS AND THERE BEING NO APPARENT MATERIAL DEFECTS NOTICED BY THE AO EVEN AF TER SEARCH WAS CONDUCTED IN THE PREMISES OF THE ASSESSEE ON 24.3.2000 AND A SUR VEY WAS CONDUCTED ON 25.3.2000 AT THEIR BHILWARA PREMISES , THE ESTIMAT E MADE BY THE AO WAS ARBITRARY AND HAD NO NEXUS WITH THE TRADING RESULTS FOR THE YEAR UNDER CONSIDERATION. IN THE ABSENCE OF ANY BASIS FOR TAKI NG A DIFFERENT VIEW IN THE MATER, WE ARE NOT INCLINED TO INTERFERE. THEREFORE, GROUND NO.1 IN THE APPEAL IS DISMISSED. 6. GROUND NOS. 2 & 3 RELATE TO DELETION OF THE ADDI TION OF RS.19,91,982/-. DURING THE YEAR UNDER CONSIDERATION OUT OF THEIR TOTAL CLAIM OF RS.21,80,733/-, THE ASSESSEE PAID BROKERAG E TO THE FOLLOWING PERSONS:- - SH. SUSHIL KUMAR SESHMAL 21,257 - TARUN KUMAR KAILASH CHAND JAIN 34,000 - ANIL KUMAR MOTWANI 52,693 ITA NO.1401/AHD/2007 FOR AY 2000-01 SUZUKI SU ITINGS PVT. LTD. 6 - ANIT KUMAR SHARMA 16,848 - CHINTAN BAJORIA 11,51,736 - VEETRAG TEXTILE AGENCY 7,15,448 ----------------- RS.19,91,982 DURING THE COURSE OF SURVEY U/S 133A OF THE ACT, A STATEMENT OF SH. CHINTAN BAJORIA, A SALESMAN OF THE COMPANY WAS RECO RDED, WHERE IN HE ADMITTED TO HAVE WITHDRAWN A SUM OF RS.3,86,000/ - FROM MAY 1999 TILL THE DATE OF SURVEY, FROM THE BANK ACCOUNT OF THE ASSESSEE, FOR HIS HOUSEHOLD PURPOSES . HE FURTHER STATED THAT THE AMOUNT WITHDRAWN FROM NOVEMBER, 1997 TILL APRIL 1998 AMOUN TING TO RS.80,000/- HAD NOT BEEN RECORDED AND SHOULD BE TRE ATED AS HIS SALARY. ACCORDINGLY, HE SURRENDERED AN AMOUNT OF R S.4,45,000/- FOR BY WAY OF HIS UNDISCLOSED INCOME. SINCE THE ASSES SEE HAD CLAIMED BROKERAGE OF RS.11,51,736/- PAID TO SH. CHINTAN BAJ ORIA BESIDES PAYMENTS TO THE AFORESAID PERSONS, THE AO ASKED THE ASSESSEE TO PRODUCE ALL THESE PERSONS .SINCE THE ASSESSEE DID N OT PRODUCE THESE PERSONS FOR EXAMINATION, THE AO CONCLUDED THAT . I) THE IDENTITY OF THE AFORESAID PERSONS COULD NOT BE VERIFIED. II) IT COULD NOT BE VERIFIED WHETHER THE PAYMENTS W ERE IN ACCORDANCE WITH THE BUSINESS TRANSACTED BY THEM I.E. SALES MAD E BY THEM. III) BROKERAGE WAS IN THE FORM OF COMMISSION AND AS SUCH IT COULD NOT BE VERIFIED WHETHER TDS HAD BEEN DEDUCTED FROM THES E PAYMENTS. AS SUCH, THE AMOUNT OF RS.19,91,982/- WAS ADDED T O THE INCOME OF THE ASSESSEE . 7. ON APPEAL, THE ASSESSEE CONTENDED THAT THE PA YMENTS MADE IN THE NAME OF SHRI SUSHIL KUMAR SESH MAL, SHRI ANIL KUMA R MOTWANI, SHRI ANIL KUMAR SHARMA AND VEETRAG TEXTILE AGENCY AMOUNTING TO RS.2 1,257/-, RS.52,693/-, RS.16,848/- AND RS.7,15,448/- RESPECTIVELY WERE, IN FACT, MADE TO A NUMBER OF PARTIES. SINCE THE COMPUTER PROGRAM REFLECTED ONLY THE FIRST NAME OF THE JOURNAL ENTRY IN THE RELEVANT EXPENDITURE ACCOUNT, THE AO T REATED IT AS PAYMENT TO ONLY ONE PARTY . ACCORDINGLY, IT WAS PLEADED THAT THE AM OUNT HAVING BEEN PAID TO A NUMBER OF PARTIES, SHOULD BE DELETED. AS REGARDS PA YMENTS TO SHRI CHINTAN ITA NO.1401/AHD/2007 FOR AY 2000-01 SUZUKI SU ITINGS PVT. LTD. 7 BAJORIA , THE ASSESSEE WHILE REFERRING TO DECISION DATED 9.5.2003 OF THE LD. CIT(A)-I, JAIPUR IN THE BLOCK ASSESSMENT CONTENDE D THAT ADDITION BE DELETED. IT WAS EXPLAINED THAT SINCE THE COMPANY HAD DEBITED H IS ACCOUNT BY THE EXPENDITURE AMOUNTING TO RS.9,79,325/- INCURRED ON HIS BEHALF AT BHILWARA BRANCH, THE ACTUAL BROKERAGE PAID TO MR. BAJORIA CA ME TO ONLY RS.1,72,411/-. AS REGARDS PRODUCTION OF VARIOUS PARTIES BEFORE THE AO , THE ASSESSEE CONTENDED THAT SINCE TIME OF ONLY THREE DAYS WAS GIVEN, THE ASSESS EE COULD NOT PRODUCE THESE PARTIES. IN THE LIGHT OF THESE SUBMISSIONS, THE LD. CIT(A) WHILE REFERRING TO AN AGREEMENT BETWEEN THE ASSESSEE AND SHRI CHINTAN BAJ ORIA CONCLUDED THAT SINCE THE PAYMENTS HAVE BEEN MADE ON THE BASIS OF B ILLS AND VOUCHERS SUBMITTED BY SH. CHINTAN BAJORIA AS PER THE AGREEMENT, NO DIS ALLOWANCE WAS REQUIRED TO BE MADE. AS REGARDS BROKERAGE PAYMENT TO OTHER PERSONS NAMELY VEETRAG TEXTILE AGENCY, ANIL KUMAR SHARMA, SH. ANIL KUMAR MODWANI, SH. TARUN KUMAR KAILASH CHAND AND SH. SUSHIL KUMAR SHESHMAL, THE LD. CIT(A) AFTER GOING THROUGH THE LIST OF BROKERAGE PAYMENTS AND LEDGER ACCOUNTS OBS ERVED THAT BROKERAGE PAYMENT OF RS.7,15,448/- MADE TO M/S VEETRAG TEXTIL E AGENCY WAS, IN FACT, MADE TO 71 PARTIES AND ALL OTHER PAYMENTS WERE LESS THAN 20,000/-. THEREFORE, ACCEPTING THE SUBMISSIONS OF THE ASSESSEE, THE LD. CIT(A) DELETED THE ADDITION. 8. THE REVENUE IS NOW IN APPEAL BEFORE US AGAINST THE AFORESAID FINDINGS OF THE LD. CIT(A) . THE LD. DR WHILE REFER RING TO THE IMPUGNED ORDERS CONTENDED THAT THE LD. CIT(A) WAS N OT JUSTIFIED IN ADMITTING THE ADDITIONAL EVIDENCE AND DELETING THE ADDITION, WITHOUT GIVING ANY OPPORTUNITY TO THE AO ,ESPECIALLY WHEN T HE ASSESSEE DID NOT PRODUCE THE PARTIES TO WHOM BROKERAGE HAD BEEN PAID. THE LD. AR ON BEHALF OF THE ASSESSEE WHILE REITERATING THEI R SUBMISSIONS BEFORE THE LD. CIT(A) CONTENDED THAT THEY DID NOT S UBMIT ANY ADDITIONAL EVIDENCE BEFORE THE AO. TO A QUERY BY TH E BENCH, THE LD. AR ADMITTED THAT THE RELEVANT AGREEMENT WITH SHRI C HINTAN BAJORIA, FILED BEFORE THE LD. CIT(A) , WAS NOT PRODUCED BEF ORE THE AO WHILE HE WAS NOT AWARE AS TO WHETHER OR NOT TAX WAS DEDUC TED AT SOURCE FROM THE PAYMENTS ON ACCOUNT OF BROKERAGE. ITA NO.1401/AHD/2007 FOR AY 2000-01 SUZUKI SU ITINGS PVT. LTD. 8 9.. WE HAVE HEARD BOTH THE PARTIES AND GONE T HROUGH THE FACTS OF THE CASE. UNDISPUTEDLY, THE LD. CIT(A) DELETED THE ADDITION OF RS. 19,91,982/- ON ACCOUNT OF BROKERAGE PAID TO VARIOUS PARTIES ON THE STRENGTH OF AN AGREEMENT WITH SHRI CHINTAN BAJORIA AND DETAILED BREAK UP OF BROKERAG E PAYMENTS AS ALSO COPIES OF LEDGER ACCOUNTS SUBMITTED BEFORE HIM ON BEHALF OF T HE ASSESSEE ALONG WITH THEIR WRITTEN SUBMISSIONS. ADMITTEDLY DOCUMENTS PLACED IN PAGE NO. 168,188A & 189 OF THE PAPER BOOK AS ALSO VARIOUS EXHIBITS REFERRED TO IN THE WRITTEN SUBMISSIONS FILED BEFORE THE LD. CIT(A) WERE NOT SUBMITTED BEF ORE THE AO NOR THE CONCERNED PARTIES WERE EVER PRODUCED BEFORE THE AO OR THE LD . CIT(A). THERE IS NOTHING TO SUGGEST THAT THE LD. CIT(A) EVER CONFRONTED THE SUBMISSIONS MADE BY THE ASSESSEE BEFORE HIM TO THE AO NOR SEEMS TO H AVE UNDERTAKEN ANY INDEPENDENT ENQUIRIES OR EVEN CALLE D FOR ANY REPORT FROM THE AO IN THE LIGHT OF HIS FINDINGS IN THE ASS ESSMENT ORDER, EVEN WHILE BEING FULLY AWARE THAT ASSESSMENT HAD BEEN CO MPLETED U/S 144 OF THE ACT. IN THESE CIRCUMSTANCES, IT IS APPARENT THAT THE LD. CIT(A) DELETED THE ADDITIONS, INTER ALIA, ON THE BASIS OF ADDITIONAL EVIDENCE SUBMITTED BEFORE HIM, WITHOUT FOLLOWING THE PROCEDURE LAID D OWN UNDER RULE 46A OF THE IT RULES,1962 AND WITHOUT EVEN GRANTING ANY OPPORTUNIT Y TO THE AO. AS IS APPARENT FROM THE FACTS OF THE CASE, THE LD. CIT(A) ARRIVED AT THE CONCLUSIONS WITHOUT ASCERTAINING AS TO WHETHER OR NOT THE ASSESSEE WAS PREVENTED BY SUFFICIENT CAUSE FROM SUBMITTING THE AFORESAID ADDITIONAL DOCUMENTS/ INFORMATION BEFORE THE AO, AS PER PROVISIONS OF RULE 46A OF THE IT RULES, 196 2 NOR THE LD. CIT(A) SEEMS TO HAVE RECORDED ANY REASONS BEFORE ADMITTING THE AFOR ESAID DOCUMENTS IN EVIDENCE. HERE WE MAY HAVE A LOOK AT THE RELEVANT PROVISIONS OF RULE 46A OF THE IT RULES 1962, WHICH READS AS UNDER: (1) THE APPELLANT SHALL NOT BE ENTITLED TO PRODUCE BEFORE THE DEPUTY COMMISSIONER (APPEALS) OR, AS THE CASE MAY BE, THE COMMISSIONER (APPEALS), ANY EVIDENCE, WHETHER ORAL OR DOCUMENTARY, OTHER TH AN THE EVIDENCE PRODUCED BY HIM DURING THE COURSE OF PROCEEDINGS BEFORE THE ASS ESSING OFFICER, EXCEPT IN THE FOLLOWING CIRCUMSTANCES, NAMELY:-- (A) WHERE THE ASSESSING OFFICER HAS REFUSED TO ADMI T EVIDENCE WHICH OUGHT TO HAVE BEEN ADMITTED;OR ITA NO.1401/AHD/2007 FOR AY 2000-01 SUZUKI SU ITINGS PVT. LTD. 9 (B) WHERE THE APPELLANT WAS PREVENTED BY SUFFICIENT CAUSE FROM PRODUCING THE EVIDENCE WHICH HE WAS CALLED UPON TO PRODUCE BY THE ASSESSING OFFICER; OR (C) WHERE THE APPELLANT WAS PREVENTED BY SUFFICIENT CAUSE FROM PRODUCING BEFORE THE ASSESSING OFFICER ANY EVIDENCE WHICH IS RELEVAN T TO ANY GROUND OF APPEAL; OR (D) WHERE THE ASSESSING OFFICER HAS MADE THE ORDER APPEALED AGAINST WITHOUT GIVING SUFFICIENT OPPORTUNITY TO THE APPELLANT TO A DDUCE EVIDENCE RELEVANT TO ANY GROUND OF APPEAL. (2) NO EVIDENCE SHALL BE ADMITTED UNDER SUB-RULE (1 ) UNLESS THE DEPUTY COMMISSIONER (APPEALS) OR AS THE CASE MAY BE, THE C OMMISSIONER (APPEALS) RECORDS IN WRITING THE REASONS FOR ITS ADMISSION. (3)THE DEPUTY COMMISSIONER(APPEALS) OR, AS THE CA SE MAY BE, THE COMMISSIONER (APPEALS) SHALL NOT TAKE INTO ACCOUNT ANY EVIDENCE PRODUCED UNDER SUB-RULE (1) UNLESS THE INCOME-TAX OFFICER HA S BEEN ALLOWED A REASONABLE OPPORTUNITY (A) TO EXAMINE THE EVIDENCE OR DOCUMENT OR TO CROSS-EXAMINE THE WITNESS PRODUCED BY THE APPELLANT, OR (B) TO PRODUCE ANY EVIDENCE OR DOCUMENT OR ANY WITN ESS IN REBUTTAL OF THE ADDITIONAL EVIDENCE PRODUCED BY THE APPELLANT (4) NOTHING CONTAINED IN THIS RULE SHALL AFFECT THE POWER OF THE DEPUTY COMMISSIONER (APPEALS) OR, AS THE CASE MAY BE, THE COMMISSIONER (APPEALS) TO DIRECT THE PRODUCTION OF ANY DOCUMENT, OR THE EXAMI NATION OF ANY WITNESS, TO ENABLE HIM TO DISPOSE OF THE APPEAL, OR FOR ANY OTH ER SUBSTANTIAL CAUSE INCLUDING THE ENHANCEMENT OF THE ASSESSMENT OR PENALTY (WHETH ER ON HIS OWN MOTION OR ON THE REQUEST OF THE ASSESSING OFFICER) UNDER CLAUSE (A) OF SUB SECTION (1) OF SECTION 251 OR THE IMPOSITION OF PENALTY UNDER SECT ION 271..' 9.1 IT IS EVIDENT FROM THE AFORESAID PROVISIONS THAT THE LD. CIT(A) CAN TAKE INTO ACCOUNT ANY EVIDENCE PRODUCED UNDER SUB-R. (1)(B) & (C) OF RULE 46A OF THE IT RULES, 1962 IF THE ASSESSEE WAS PREVENTED BY SUFFI CIENT CAUSE .IN THE CASE UNDER CONSIDERATION, ADMITTEDLY THE ASSESSEE PLACED THE A FORESAID DOCUMENTS IN PAGE NO. 168,188A & 189 OF THE PAPER BOOK AS ALSO VARI OUS EXHIBITS REFERRED TO IN THE WRITTEN SUBMISSIONS FILED BEFORE THE LD. CIT(A) AND THERE IS NO EVIDENCE BEFORE US THAT THE SAID DETAILS/DOCUMENTS WERE EVER SUBMIT TED BEFORE THE AO. MOREOVER, THERE IS NOTHING TO SUGGEST AS TO WHETHER OR NOT TH E LD. CIT(A) RECORDED ANY REASONS BEFORE ADMITTING THE AFORESAID DOCUMENTS B Y WAY OF ADDITIONAL EVIDENCE. SINCE IN THE CASE UNDER CONSIDERATION, TH E ADDITIONAL EVIDENCE/DOCUMENTS FILED BEFORE THE LEARNED CIT(A) HAVE BEEN ADMITTED ITA NO.1401/AHD/2007 FOR AY 2000-01 SUZUKI SU ITINGS PVT. LTD. 10 WITHOUT RECORDING ANY FINDINGS AS TO WHETHER OR NOT THE ASSESSEE WAS PREVENTED BY SUFFICIENT CAUSE FROM PRODUCING THE SAID EVIDENC E/DOCUMENTS BEFORE THE AO AND WITHOUT RECORDING ANY REASONS IN TERMS OF RULE 46A(2) OF THE IT RULES,1962 AS ALSO WITHOUT EVEN GIVING ANY OPPORTUNITY TO THE AO , ESPECIALLY WHEN ASSESSMENT IN THIS CASE WAS COMPLETED U/S 144 OF TH E ACT, WE FIND MERIT IN THE UNDISPUTED CONTENTIONS OF THE LEARNED DR AND THEREF ORE, IN THE INTEREST OF JUSTICE AND FAIR PLAY, VACATE THE FINDINGS OF THE LD. CIT(A ) AND RESTORE THE ISSUES RAISED IN GROUND NOS.2 &3 OF APPEAL BEFORE US TO HIS FILE, WI TH THE DIRECTIONS TO FOLLOW THE MANDATE IN TERMS OF RULE 46A OF THE IT RULES, 1962 AS ALSO PRINCIPLES OF NATURAL JUSTICE AND THEREAFTER, DISPOSE OF THE MATTER IN ACCORDANCE WITH LAW AFTER ALLOWING SUFFICIENT OPPORTUNITY TO BOTH THE PARTIES . WITH THESE DIRECTIONS, GROUND NOS. 2 & 3 RAISED IN THE APPEAL ARE DISPOSED OF AS INDICATED HEREINBEFORE. 10. GROUND NOS. 4 & 5 BEING GENERAL IN NATURE, DO NOT REQUIRE ANY SEPARATE ADJUDICATION AND ARE ,THEREFORE, DISMISSED . 11. IN THE RESULT, APPEAL IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT TODAY ON 23 -7-2010 SD/- SD/- (T K SHARMA) JUDICIAL MEMBER (A N PAHUJA) ACCOUNTANT MEMBER DATE : 23-7-2010 COPY OF THE ORDER FORWARDED TO: 1. SUZUKI SUITINGS PVT. LTD., 34, SHREEJI CLOTH MAR KET, SARANGPUR GATE, AHMEDABAD 2. ITO, WARD-8(2), AHMEDABAD 3. CIT CONCERNED 4. CIT(A), CENTRAL, JAIPUR 5. DR, BENCH-C, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER DEPUTY REGISTRAR